Brexit limbo: Businesses ‘cry out’ for certainty | Insurance Business

No-one wants to be left in the dark, so the alleged lack of clarity in the government’s response to a December 2017 Brexit-related report by the Treasury Select Committee of the House of Commons has come in for some flak.

In a new 10-page report published today, the committee outlined its transitional arrangement recommendations along with the government’s corresponding responses – which, for the most part, talked about the implementation period still being negotiated with the European Union. From the government’s responses, one particular reply was regarded by committee chair Nicky Morgan MP as unusual.

“As with any regulatory change businesses are advised to understand how these may affect their business and explore potential impacts,” read the response. “The government will also continue its already-extensive engagement with businesses across the UK.”

Reacting to the ‘advice’, Morgan said: “In this environment of pervasive uncertainty, it is extraordinary that the government – in its response to the committee’s report – is advising businesses to ‘understand’ and ‘explore potential impacts’ of ‘regulatory change’ arising from Brexit.

“Firms can hardly begin to understand change until they know what it consists of. Brexit uncertainty for businesses still looms large.”

While the committee is happy to note that its recommended framework for transitional arrangements has been largely accepted by the government, Morgan believes businesses will have no choice but to prepare for the worst-case scenario amid the uncertainty.

“Businesses are now crying out for the certainty of having a transition period secured,” said the committee chair, who added that a failure to reach agreement in the March European Council would be economically damaging.

BIBA reaction
The British Insurance Brokers’ Association (BIBA) has also sounded off, with chief executive Steve White saying the sector is in need of “certainty of transition” especially since renewals are now being prepared.

“We receive £8 billion in revenues from the EU and while we are pleased that the government agrees they want a transition period, the lack of both detail and progress in this area concerns us greatly,” lamented White. “In the absence of a transition, we’re faced with the prospect of breaking an agreement with the customer or breaking the law by honouring it. This is an unacceptable position to be in.”

On a positive note, White cited the inward-passporting temporary permission regime mentioned in the response, which would allow EEA firms to continue to pay insurance claims. However, while BIBA welcomes this, the trade body’s CEO highlighted the need for further detail and confirmation that the regime would be a ‘go’ come next year.

“It is important that when we transition, we know what we’re transitioning to,” said White. “Not knowing what the landscape will be like post-March 2019 means businesses cannot plan and some are already planning for the worst.”

As Morgan has put it: “Key questions remain unanswered and details are in short supply.”